the fed was following it down. this is the reason i think we are having a hard time pushing rates up. the recovery really has not taken hold. i would not put the saie blame n the fed for a rates, other than they could have gotten a better recovery going, but that would put it on people who buy and sell treasuries and invest. is a lot of risk aversion out there. host: todd, go ahead. caller: thanks for taking my call. i just wanted to comment that the past 104 years, the wealth has been distributed from the 1%, and that top is the direct result of the federal reserve and 16th amendment, which brought in the irs. an amendment that was not ratified, and was ready much done in a closed room, a backroom deal. that is what i want to say. and then this guy you have got on, he thinks we need more controlled by the federal reserve, or control of the economy. it is ridiculous. it is going to be another wealth distribution to the top. that is what i have to say. good morning. host: david beckworth? guest: i am sympathetic to t

>> it is a good thing for the feds. it's a problem for the ecb.u look at things in europe, the euro continues to strengthen. inflation is a problem for europe, but for the u.s. it is a perfect situation. especially as you get ready to unwind the balance sheet, and there are indications that could deliver another hike in december. jonathan: financial conditions are easy and that is a green light to hike, but the inflation data is softer here at the real tug-of-war is the soft inflation data versus the easy conditions. they are concerned about the financial stability aspect of. >> yes. i think what they are to focus on is making sure the growth doesn't get hampered in any significant way because of policy moves. instead of enjoying the circumstance, building themselves room by tightening policy while financial conditions are not tightening themselves, they are bemoaning the fact that conditions are not going well, that is a good thing. i do not know why that is such a terrible thing to be happening. jonathan: we heard talk about pricing in his own s

nick, earlier this year the market was actually led by the fed very briefly. ust feels like the federal reserve has lost conviction over the last couple of months on their own forecast. do you anticipate the dot plot so to speak is about to gravitate down toward the market's view of the world? nick: it has to and that's a matter of fact. if you look at what forecasting has done over the past quarter of a century, the markets have consistently got the market wrong in the sense that they projected rates to be higher. in most cases, rates finished lower throughout the year. i'm talking overall rates and not just the cash rate. we are in an environment where we live in a world of doves. let's look at the market environment. you have data that is weak, inflation that's weak, walking back on hawkish remarks, moving off potential rate hikes. accommodation is here to stay. while we may be unwinding it over time, it's going to take time. that's what people need to realize. a lot of people are calling for the bond bubble to end or pop. we are not there yet. we are in an

during that time, the fed is raising rates. w it has been quite stable, partiuclarly the short end. i would call it time. mark: does that stop the ecb in its tracks? or do they plow on with normalizing monetary policy? guest: there are two issues for all central bankers. one is normalization. if we were at different levels, there would be more flexibility. effect would be to normalize back to zero. the second is what i would call legacy. the fed, we are in the home straight for janet yellen. of what kindndful of legacy do you want to leave? by letting monetary policy run at hot levels for too long, and longer-term perspective, inflation really picked up? do you want that to be your legacy? there is only one way to go, higher. the long end is more difficult. it is subject to all sorts of different forces, supply, d emand, so one, so forth. on the short end we will see effect. vonnie: what gives you that certainty? inflation expectations for thenesses are down here in united states, and generally, inflation expectations are lower.

unlike the fed, the ecb has been buying corporate debt as well.llenge bigger for draghi than was for ben bernanke at the time? subadra: i think so. they have to be very careful to not undo what they have done so far. they have to be extraordinarily careful about communication. like a pointed out earlier, the environment right now is not very conducive for them to taper because of the fact that the euro continues to be very strong. i think that they have a tough balancing act ahead of them. jonathan: i know a lot of people are critical of the timing rule and where rates would be implied by it. if you look at the breakdown of europe and the taylor rule for a country like germany and where rate should be of the periphery, we can guess the line of the bottom. that is where rate should be for the periphery. you can guess which country is the white line because that is where rate should be for germany. that picture has gotten somewhat better. that is still ultimately the problem for the eurozone, isn't it? krishna: the eurozone has structural issues. th

i think it derails the fed hike cycle. nathan: you look at a 30 year and at the start of the year, people would say that would go materially higher. is there a buying opportunity in some regards? nick: i look around the world and i say, ok, u.s. yield stick out. the reason being is that you have japanese yields that are yielding roughly 10 basis points. german bunds yielding 50 basis points. whether it's in the 30 year part of the curve or the 40 part of the curve, i'm what he my chops. -- as an investor, i'm looking my chops. globally if i'm sitting in my own country and i'm running 10 basis points, i think there will be a natural pull of rates keeping down, even so the data proves rates up. we will be an environment where d.ta stays range boun priya: i think it matters at the treasury comes with 50 year bonds. and the treasury tries to fund the fed portfolio come of issuance -- i absolutely agree with that that there is value. there is a risk that the treasury decides to extend a lot more. there's always demand from the r

it is ironic if he were to end up with the fed. hour and 30 minutes ago. upside surprise on the main headline number. 209,000. the unemployment rate came down to about 4.3%. wages with an upside surprise of about 2.5%. we caught up with mohamed el-erian a little bit earlier on bloomberg tv ahead of the numbers and talk to him about the federal "bloomberg markets"t now. ♪ >> it is 10:00 a.m. in new york, 3:00 p.m. in london him at 10:00 p.m. in hong kong. i'm vonnie quinn. barton.ark welcome to "bloomberg markets." ♪ vonnie: fear other top stories we are covering from the bloomberg and around the world -- labor markets showing some strength. payroll came in at 209,000. wage growth, a little higher, as well. is it all enough for a rate direction for the u.s. economy? bill ackman is taking aim at payrolls. he wants effective control of the board, can he make that happen? trumpitics, president starts is working vacation as special counsel robert mueller is set to have impaneled another grand jury in the rush investigation. attorney gen

the fed has probably agreed yes you do. wn the same line but it will struggle to communicate that. >> there will be two speeches from president draghi this week. we are going to get two from mr. draghi. say i have actually been to the event. get together and give various speeches. kathy jones around the table with us. let's talk about stock versus flow. the importance of stock and the balance sheet, how similar is that going to be even when you do payback on bond purchases? >> that is the big debate or the fed believes in stock and they believe that is significant. they gradually reduce a lot of stimulus in the market. concerned as we get to the unwinding of the balance sheet that the market does not seem well prepared for it. see aned that we might the in the term premium stock argument may not hold up well. >> we heard a lot of calls for we have beenade hearing that for long time. , knowing they will be fully aware financial editions tightening. not any time soon things are picking up but not well. they are robust and ever

doingnything the fed worrying you? craig: not at all. en comfortable and confident with the steps the fed has taken to rescue from the rate recession as well as managing recovery going forward. at the upcoming fomc meeting with regard to the balance sheet, we don't see a repeat of the taper tantrum. we see a fed rate hike coming in december. michael: speak and tantrums come i want to bring up a chart and take you to the short end of the market. #btv 8582. this is the spread between one month and three-month builds. the last 10 times we had a debt ceiling problem, we saw spike below zero for that spread. we are not quite there yet over on the right hand side, but you can see us moving down. let's start with brian. are you concerned that we are going to have something happen in the debt ceiling debate that will cause the markets to react significantly? brian: know, i think the debt ceiling plays out as it has most of the other times. ando to the last minute they will eventually pass. they will cause some market concerns in the near term, bu

as of the fed doing that? me thing and not gotten lohse 2% are it why will waiting turn that around and mark -- around. francis: we have seen a settle shift from the federal reserve, a lot more on targeting the real meaningful rate. they believe that is above 0%. they need to get the rate up to the inflation rate. even if the inflation rate is 1.7%, that still means two or three more hikes to get to a neutral rate area the market is underpriced for that an area. i think the focus needs to move away from will we ever get to 2% to when will the fed have a neutral rate. they can probably do that next year. david: that sounds like a good plan. i don't hear that from the fed. they don't say it about 2% during -- 2%. haven't market they are trying to guide the market toward and push rates higher. at this point, it is not working. they want to get rates up. alix: i want to get to our economist's. cpi, ifwed that core you back out wireless services and prescription drugs, it continues to fall, down to 1.9%. sinceore cp

-- two- at the fed funds rate. of them hiking the rest of this year are relatively nil. thing on inflation, as we saw once again today, the ability -- we saw-inflation, as once again, the ability of the fed to argue inflation is not going up begins to not hold water. julie: thank you so much, cameron crise, and fx strategist, vince cignarella. what do those lower-than-expected inflation numbers tell us about the economy, and what should we expect from the fed? we talked about it a little bit. we are going to talk about it a lot more. from new york, this is bloomberg. ♪ mark: i am mark crumpton. president trump has reiterated his threats against the north korean regime. speaking to reporters at his golf course in new jersey, the president said kim jong-un needs to watch his words and actions. threate utters one the in the form of an overt threat, which, by the way, he has been uttering for years and his family have been uttering for years, or if he does anything with respect to glom or any or anyplace- guam else tha

the ecb signaling is patchy, as is the fed. ich sent a message the euro soaring and then the ecb dialback on their match -- on their message. draghi is well aware that words can move markets and therefore affect my internal policy and sometimes that works and sometimes it doesn't. today, they are not all that concerned about the message that is out there. vonnie: richard, what about jackson hole? always looking at anything -- looking for anything to come out of that symposium? richard: from a monetary policy standpoint, it is something investors can really sing their not, into, probably think it will be something more theoretical and academic. there is always a chance we could get something market moving, but it does not look like that is going to be the case. nejra paul, i want to get a little more clarity about the phrase on more policy space and facility to adjust policy -- and for stability to adjust policy -- and flexibility to adjust policy. paul: that is the intriguing statement from the accounts. this is a summary accoun

the fed has gone through a process of slowing downward shoot adjustment. happening at a glacial pace. >> all of the companies have taken advantage of huge demand so they are issuing long bond at tight spreads. so, the corporate market has extended quite a bit. >> central banks around the trillione brought $60 worth of assets. they have to buy something and go somewhere. joining us, let's talk about the 40 year security that amazon came to market with. the amount of duration is increasing. the index is increasingly tight. help me work through it. >> i think what that is telling you is companies are making the right decision. debt is very cheap and extending the duration as much as possible , as much as you should do. the question is why are investors buying it. i think the reason is because they have no other choice. so for any portfolio that needs bondbonds, the government market doesn't give you enough yield and you go into the corporate bond market to get it. it is that simple. you can make it complicated, but it isn't. jonathan: you wonder what kind of

the question for the fed, where has the inflation gone?decision to raise rates? we have heard different approaches. i think about inflation, i think about our mandate, which is right stability. relative to a growing economy, we are adding jobs. i think we are in a good place and we should have monetary policy. we should begin to gradually remove accommodation. we are moving in the right direction. i think we are. get backion may well to the 2% target. you have to understand the cyclical forces and the model that would suit just what the forces would have been offset by new forces, which you can understand by looking at industries and talking to ceos. big day inill be a wyoming. we are joined by michael mckee. do hearaid earlier, we from the dallas fed president. the world is changing. maybe some of the ways we look at it don't apply anymore. a question of why you are raising rates at this point. if it's because inflation should rise when unemployment falls. kaplan wonders if we see the models break down. will we see inflation stuck at lowe

we will get to the point where the fed starts reducing the size of its balance sheet. we cannot get infinitely the same kind of news with this kind of heavily correlated low volatility move going on. bigt of the folks who are names who may be got it right at the beginning of this rally are beginning to say, look, this cannot go on forever. that is self-evident. happens tost is what the kind of spread product and particularly the bond space and emerging-market corporate debt. the big beneficiary of investors being crowded out of the u.s. treasuries by the fed when they built up that quantitative easing armory. what happens to those yields when those balance sheet strength? we don't know that. if rates are low and inflation find that we may go to a world where there is not something a disaster but harder to make money. alix: you hearken back to what was written today by a big treasury bull. you're not getting compensated for the amount of leverage and the amount of risk that you taking on. do you feel like it's going to be an event risk or is it going to be a slow grind

the fed put out a very slow pace of a trillion dollars over three years' decline. the e.c.b.ill likely follow pace when they eventually announce this. it will take by all measures it looks like multiple years, five or 10 years, to get the balance sheet lower and there's an echo fear of the taper tantrum and central banks are afraid to do anything quickly and actually we'd say they're missing too slowly, and the surprise in 2018 may be the increasing pace of the fed potentially under a new -- pace of the fed potentially under a new leader that ultimately eventually an acceleration of any policy ultimately announced by the e.c.b. jonathan: we'll get to the federal reserve conversation in a moment, but just comparing the experience of the balance sheet and the path of balance sheet and the power of the balance sheet at e.c.b. and the flow versus debate, where do you stand, ira? ira: flow matters significantly more when flow is what's driving prices and that's what's driving prices right now. the stock effect has a much longer term kind of balancing effect where you say ok, shoul

our view is that you need to listen to the fed, because despite concerns about whether or not the fedill move in december based on inflation, i think our view is they will. they are talking about a gradual path. clearly the expansion we have seen has legs to go. we see no recession on the horizon, it is two years down the road at the earliest. looking at the equity markets, there is volatility. we expect correction there, but equities and high-yield have run hand-in-hand. there is room to run in high-yield. it is time to be cautious here also. rachel: we do not disagree that there is plenty of time left in the economic cycle, but we do think that the fed will hike at least once probably twice in the next 12 months. frankly we are right on the brink of what we would term quantitative exit. when we see the fed shrink balance sheets at the end of september, that will begin to have a technical impact on the market. in particular, we have seen very suppressed volatility for the last couple of years. we think volatility will pick up, high-yield correlates with high volatility. i have the ch

the fed would run out of space to counter the fiscal drag.onnie: it is a fascinating setting and thank you for sharing some of your conclusions and we will chat with you. joel prakken macroeconomic advisers cofounder. let's get more in the news that apple is holding an event in cupertino, california september 12. the first ever event held at apple's new headquarters. market is in san francisco with the latest. "let's meet at our place" is what it says. >> usually the tagline has a hint at the new project -- product to be introduced at this time there are hinting at the new location, the new apple park campus, the steve jobs theater that sits around 800 people and will showcase the new iphone and the apple tv and the new couple watch that connect to lte networks. newie: showcasing of the campus, will it take away from a lack of gasp moment during the conference? we mostly know what apple is going to say. mark gurman: that is a good question. i a slightly surprised but not surprised they are doing it at the new campus. i feel like it is the big

jon: this could be the fed chair 's last visit to jackson hole as the financia fed chair. that --a way she can do matt: that will probably come out of the part of praising the fed for all it's done since the crisis to make things better. they usually do include warnings about rolling that back. a lot of fed officials have said we can review this and roll it back a little bit. it's not there were that balance is in their minds at the moment. by: for more, we are joined jim bianco and nick bennenbroek. title, the theme of jackson hole this year is "fostering a dynamic global economy." what can the fed do to foster a dynamic global economy? that is a good question. not create financial instability. this has been a big topic for the fed ever since the financial crisis. they think part of the crisis was an unnecessary panic by financial markets over the mortgage market and housing that made a bad situation worse. if they want to foster stability in the global economy, the fed not more worry about creating instability in financial markets. betweens balancing act loose financial c

not believing the fed is going to normalize in a rapid way thinking that the run off in september or the balance sheet won't be much of an event. so we'll see if there's anything that yellen says or chooses to focus on that disturbs that. >> well, the topic of her speech is financial stability and we'll start to get the headlines around 10:00 a.m everyone wants to know does she give a clue as to whether they're going to raise interest rates again this year as many of the fed presidents have come out and said they would like to do and how do you explain what's going on with the lack of inflation given the jobs market is so robust economic growth is pretty much okay and yet they're missing on that mandate which sort of gets me to a chart that i picked up on cost of living and what we're actually paying. >> this is the best chart ever. >> this is the chart of the week. >> it's why not we're not seeing inflation they're going to be cutting prices and you'll see prices cut across the grocery space as well. you talk about it making it cheaper to buy cell phone service. technology putting p

the fed has to be somewhat anticipatory. f what it actually thinks economic conditions are because of that lag in policy. alix: the question is how much? a disconnect between the market and where the fed is. the green line is the fed and the white line is where the market is. the market is underpricing three, four rate hikes. how much should they rerate and what is the market impact? scott: that is a great question -- andrew: that is a great question. the market repricing will be relatively modest. the fed will hike once in september but the market will never fully price in that hike by the end of this year. next year, it becomes much more interesting because our economists expect the hike -- in fed to hike four times 2018. it is really in 2018 were there is a much larger gap between the type of policy that we expect from the fed and what the market expects that is one reason why we are relatively sanguine on equity markets and risk, this year and we are more concerned about 2018. david: we have not seen financial conditions

show me the insulation. new york fed president bill dudley on deck to speak, and markets get the latest read in the u.s. welcome to bloomberg day break on this thursday, august 10. m alix steel alongside david westin. jonathan is off today. we head into the open of trading here. s&p futures down by 10 points. but remember, that dip was bought yesterday. s&p closed relatively flat on the day. a euro-dollar treading water around 1.17 as the dollar moves slowly higher. you have some buying coming into the treasury market. yields moving down by one basis point after a mushy auction yesterday, $15 billion of 30-year notes are going to be auctioned at 1:00 p.m. gold up for three days in a row, up. david kohl's is reporting they had a slight beat on revenue. but they did better on earnings per share, $1.24 as opposed to $1.19. that's the first of several to come. now we want to go to our morning brief. we're going to continue with retail sales reports, as we have macy's out at about 8:00 this morning eastern time. 30 minutes la

the fed has reduced the rate of growth. vonnie: the fed is seeing this, too.on't know what the fed is seeing. they don't look at those. they focus almost myopically on the phillips curve, a more version of the dual mandate -- a morphed version of the dual mandate. there is no phillips curve trade-off. reserve is operating on a concept that is basically flawed. it causes a couple problems. vonnie: let me interrupt because that is the environment we are in. if you are a traitor, do you don'tave to -- trader, you just have to accept the flaw? you still have to live with this. our: we are investors and clients expect us to take the multi-term view. the influx of these extraneous factors can be very powerful over the short run. the fact of the matter is, over time, the fundamentals will dominate and the monetary restraint pushed on this economy, the other structural problems we are facing suggest to me that the trend in rates is lower. i would add one thing. to 1990 when the bond yield was around 30%, there are tens of thousands of forecasts of a bear market in bon

do we have clarity about the fed is going to do? ear they can't do very much. the most potentially disruptive challenge we face with regard to the fed is who is going to lead it and we are not going to know about that until later this year or next year. , i think thaticy they are stuck now. they know they can't put rates up very much. the balance sheet unwind is going to be very slow. who help our michael mckee hangs on every "surveillance" word. what is your number one question for mario draghi? steven: what is my number one question? tom: what would you ask president draghi right now? steven: i would like to know what he is thinking in terms of common issuance and the outlook for some kind of eurozone bond supply. obviously, it is not his to decide because ultimately it is down to governments, but the ecb has a role in all of this and i think it would be interesting to see what the vision is on a multi-your basis as we gradually progress toward the full monetary and fiscal union. he might want to discuss that in a private forum. fr

is that something the fed should consider? >> for the time being no.is country, and that is deflation. high inflation is not something you want, but you also don't want deflation, particularly when you are this highly leveraged. u.s. debt held by the public is 76% of gdp, japan's government is highly leveraged, and if you have deflationary forces, it is hard to deleverage. too high inflation is dangerous, and so is too low inflation, and that was the thinking in the 2% target, and that thinking is still solid. haidi: that was robert kaplan speaking with kathleen hays at jackson hole. ahead to the look verdict when it comes to that jay y. lee trial. aboutak with the writer the rise of the samsung empire and the fall of its heir apparent. this is bloomberg. ♪ so new touch screens... and biometrics. in 574 branches. all done by... yesterday. ♪ ♪ banks aren't just undergoing a face lift. they're undergoing a transformation. a data fueled, security driven shift in applications and customer experience. which is why comcast business delivers consistent networ

the fed looks at potential gdp at 1.8%. ? will this boost inflation the august core pce, the fed's main gauge. it is expected to fall 0.1% to that five months in a row it has pulled away from inflation. looking at average our earnings of 2.6%. 4.2%,mployment falls to maybe that will embolden the fed. the moves and markets today, dollar coming off the have suggesting investors got more confident after seeing that gdp report. now we have to wait for the inflation number and the big payrolls on friday. rishaad: nice one, kathleen. let's look at the floods in texas. why? they have halted shipments of liquid todd -- liquefied gas. ben sharples has a look at the fallout. >> harvey has gone global. it is rippling through. rishaad: could we be faced with lpg shortages? asian buyers have to look for alternative supply. you're seeing that through the market at the moment from gasoline to lpg. means buyers have to find alternative sources of supply from the middle east. the question is how long these refining operations will be down and

this year and the fed has highlighted them. someare technology, dampening of consumer prices earlier in the year after china and the west raised interest rates. we think that is behind us. we see growth accelerating into the second half of the year a little bit above 2%. we think the underlying trend in prices,n -- rent, home and wages -- will continue to accelerate into it 2018. is the global backdrop dissipating. from the segue economic backdrop for a moment and toward the policy, i want to ask about gary cohn. earlier today we saw a blip in the equity market and in the treasury market when there were reports he might be leaving the white house. he isite house said, no, not leaving his position as head of the economic council. how important do you think his position is to the markets and to getting president trump's tax reform and economic agenda satisfied? gemma: i think there are two points to take out of the headlines and the rumors. one is it tells you the market is focused in on who the next fed chair may be. the trump ad

>> at a time where the world thought the fed maybe one year-and-a-half ago, the world thought the fed move rapidly, and people may have thought the neutral rate was higher than they may think it is today. that may have had some destabilizing impact on flows to emerging markets. that has settled down. some did when the fed attempts down its expectations of the path of rates in the first quarter of 2016. since then, we have seen healing, healthy capital flows, and more healthy growth in emerging markets. do i think it is complacency? i do not, i think it is a little bit the fed has adjusted and maybe central banks adjusted. the fed has adjusted, that the path of removal of accommodation , yes on the path of normalization but it needs to be gradually done and patiently done. we have in the back of our mind that rough moves make read destabilization around the world. at the moment, there is not complacency, i think the world has adapted to a more muted pace of removal of accommodation. vonnie: that was the dallas that will reserve chairman robert kaplan speaking with kathleen hays. mark:

the fed is asleep! we are going to have thousands of people, we have thousands of people losing their homes right now. this is crazy. this is not the time to be complacent >> they know nothing all people really remember about my rant a decade ago, was that i kept shouting that the fed was nuts, asleep, knew nothing yet ten years ago today when i came out on the set for my regular stop trading segment, i was incensed by tv terms, i lost it screaming at the feds, seeming clueless about what was happening in this country, that people would soon lose their jobs, and they would soon lose their homes by the millions. let's just call it unscripted. if it hasn't dawned on you now yet, i am a passionate guy and my passion got the better of me that day, because i had so many friends in the business and they were desperate to try to stop the financial armageddon that was just beginning. they needed help from the fed in the form of immediate rate cuts and loans in order to stay afloat because the horrific mortgage d

minutes the are grappling with that issue. philadelphiahe fed, they put out a research paper thing the cannot detect any phillips curve relationship sothe data it's the 1970's what do you think about that research and about the utility of the phillips curve? >> i have long argued that since the 1970's we have known for well that the full of -- the usefuls curve was not a device for conducting policy but central banks are stuck in that mode. we knew in the 1970's that when inflation was 10% and unemployment was 10% that a very there was not good relationship tween those two things. doesconomics profession have some challenges and thinking about inflation and forlips curve as a device guiding policy seems to be mistaken and i felt it was mistaken when i was at the fed and before that so there are some challenges there. >> is there a likelihood they will change strategy given you have been arguing for a rethink for a while and do you think the fed should be tightening faster right now? be moving toward normalization faster than they are but they're

the fed made it clear they don't see it either. there's something bubbling, but no big wage pressure margins will stay higher for longer >> what i hear from a lot of people from around the desk is that the u.s. at some point is going to underperform. europe has a lot further to go that is the consensus view at this point do you agree or disagree >> completely agree. margins in the u.s. are at cyclical highs margins in europe are on average like that. monetary policy will stay easing longer in europe than in the u.s. >> you work in a field that's not loved much now, the fixed income field where do you see opportunities where do you see value in the space? >> certainly it's an interesting time for fixed income investing. one key is to be nimble and recognize it's not just about the government bond space. we think there are a lot of opportunities in spread sectors, places like emerging market debt, for instance >> where do you see value in the fixed income space >> i concur that there is still relative value in investment grade credit

david: is this specific to the fed and the new position of the fed being independent, or is this with appointments in the cabinet? should people be turning to stone unless they agree with the president on his views -- turning this down unless they agree with the president on his views? narayana: with the position of this kind, i don't think there needs to be absolute correlation on every issue, and there shouldn't be. on the other hand, the last few days the president has made it arer that his views certainly different on many issues that even past republican presidents, to set one example. you know, i think that means it might well be a very large gap between himself and the .otential cabinet appointments i think people should be taking those considerations into account and not thinking about merely a technical issue of how will i be able to do this job, because i think he will end up being judged by history on -- in a broader context. david: at the same time, there's a special status of the fed that is independent. those are not thought to be political appointments, unlike the posit

scarlet: that's chris condon reporting from the fed. it looks like the markets are taking the fed's reticence to perhaps raise rates the rest of the year to hard. taylor riggs is following reaction that we are seeing in markets at this point. i'm looking at the bond market. yields are dropping. the s&p 500 taking a little tick upward. not a big move. equities were up about .2% heading into those me that -- minutes. here to the s&p 500 index you can see a little bit of a tick higher. market usenoon lower, we are near the lows of the session. nonetheless a big tick higher up about .2%. let's look at the 10 year. chris condon had raised a few concerns about that inflation data. the lack of inflation being an increasing concern for the fed. you are seeing the 10 year yield here. by abouter for the day three basis points. a little bit of that risk off slight risk into quality with bonds. give this credit to the fed. they communicated pretty well for their interest rates and that balance sheet reduction. let's look at gold, another safe haven

with market numbers in the reaction to the fed. t also to what has been happening in washington with president trump and his fight with of the business community. i want to bring in su keenan. su: you hit the nail on the head when you said it was an interesting day on wall street. look at the market, we close with gains. the rally that was in place stayed in place despite the fed minutes. normally we see reaction in the spot -- in the stoxx, but the the stocks. urban outfitters up the most in several years because a positive performance in their various chains. much better than expected. it target boosting their in spite of some difficulties retailers are having. that underscores the strong july spending report. it will the spotlight, be planning investment in tv shows and films. they have hired executives and are going big with content. g #btv 1994. when we talk about the equity rally scene thoroughly in place, they kept moving higher today. where is the weakness is the big question? from a historical perspective, the rally has roo

the fed minutes yesterday seen as a bit dovish, but at the margin it seems like there's a commitmento the normalization of policy, albeit perhaps rate hikes there remains division on. ten-year treasury note, a bit of slippage yield to 2.24% around that level again. yields came off a bit because of the dovishness of the minutes and those political issues >> global bonds rising today as for the action in asia overnight, let's show you what happened after wall street lost much of its earlier rally. japan closed in the red fractionally hong kong down a quarter percent. shanghai comp and kospi in korea continue their comebacks from last week. as for the early action in europe this morning, just let us show you what we're seeing red across the board declines of 0.3% for the dax all the way to the ftse 100 and across europe. spain is down a half percent >> germany an france coming in today were up 2% for the week sl just a bit of profit taking. >>> oil prices slipped yesterday given the focus of the fed mys and on political stories down 1.6% yesterday. dollar board, which slipped 0.4% yeste

the fed is a lot further along. nathan: paul gordon, we want to cross over to you in frankfurt. ,he message is pretty clear they are concerned about the euro. this is the most explicit reference to the euro in months out of the ecb, isn't it? paul: yes it is, very much so and relative -- moderately strong words. draghi alluded to it in his press conference, but this is more explicit and we can see the accounts of the meeting. there is concern generally that financial conditions have tightened a little bit over recent weeks or in the run-up to that meeting and that is something that will likely be weighing on policymaker's mines toward the september 7 decision when they may or may not decide what they are going to do with tapering or they may put that off to october. looking at the headlines across the bloomberg, we have the headline about concern over the -- euro overshooting. at the same time, they are concerned they do not have conclusive evidence of inflation. are those tightly linked? paul: there is a beastly a m

the kansas city fed -- do we have the ten-year? >> around 2.2% just shy of that >> 2.19, so pretty much marching in place >> it's a strong day for asian equities across the board. up about 1.2% hong kong. hang high up nicely. japan up a half percent. european trade, which has been encouraging for the ftse 100 this week, despite declines in the u.s. up 1% germany an france flat for the week ending on a slightly positive note slight gains for those three markets. >> as for the currency market, the u.s. dollar ahead of jackson hole against the euro. and we got that double dose of central bank speak janet yellen and draghi. euro firmer, little movement there. the pound, weaker again for the week it's at 1.2815, this is the fourth week in a row we're seeing pound declines. it's helping the ftse 100 trading near the highs of the week >> the pound at an eight-year low against the euro earlier in the week gold prices, which have not done much this week not doing much today flat at 1292 >>> on today's wall street agenda just one piece of ec

the fed symposium at the back end of the month.e going to have yellen draghi, crucial for one of the key pairs. euro-dollar. patrick armstrong, still with us. patrick, we want to talk about the dollar, but what i'm interested in is the relative difference that we are going to see in the tone from draghi and yellen of jackson hole. could that start to change that pair? patrick: very much so. i think draghi have used jackson hole incredibly effectively in the past. 2014 we may be at a pain point for him. historically, that is when he added to his rhetoric and the policies in place that are not excessively designed to weaken the euro. that is the intention of qe and negative interest rates. moreld probably be surprised if we don't hear something out of jackson hole, extending his dovish policies. guy: yellen, on the other hand, janet yellen -- the market is positioned almost as if q1 is going to be the q4 story in terms of the data the u.s. economy delivers. the market is increasingly coming up with its mind on whether or not we get a